Monday, April 18, 2011

It matters because we (try to) trust nonfiction authors, nonprofits, and ratings agencies to be truth tellers.

It matters because we have several ratings agencies that came up with very different "ratings" of the Central Asia Institute - and now we don't know whom to trust in this regard. 60 Minutes cited research from AIP on the Central Asia Institute, Mortenson's charitable foundation. AIP (The American Institute of Philanthropy) raised several concerns about the organization's financial statements. At the same time, however, Charity Navigator, another rating group, was giving CAI four stars, its highest marks. (I checked CN at 8 pm PST Sunday April 17, 2011 - after watching the episode of 60 minutes. There was a four star rating. At 12:30 pm on Monday April 18, 2011 the four star rating was still there, with a flashing red "Donor Advisory")

AIP noted a worrisome lack of audited statements. There is also a fair amount of confusion about what percentage of book sales and speaker fees goes to the charity, what goes to Mortenson, and what goes to the publisher/speakers agency. Here's one paragraph from the AIP report:

"If CAI is going to take credit for Mortenson's speaking engagements as a program expense of the charity, it makes sense that it should be entitled to a portion of any revenues, such as speaker's fees, generated at these events. Nowhere on CAI's 2008 tax form does it report revenue from speaker's fees, and CAI would not respond to AIP's question as to whether or not the charity receives any of the fees or ticket sales from these events."

Charity Navigator usually gets criticized for having its rating systems rely tooheavily on financial information. This case makes it appear as if it didn't review that financial information carefully enough (or at least not as carefully as AIP).

What is a donor to do when one rating agency gives a four star rating on an organization that raises red flags for another rating agency?

This is so inside baseball you may be rolling your eyes. As a hyperbolic mind game, compare the role that ratings organizations of nonprofits are trying to play to the role that Moody's and S & P play. Those two companies rated the subprime mortgages that banks turned into mortgage bonds that subsequently became known as "toxic assets." We know where that got us. The banks depended on the raters to package a product that they could sell. If donors depend on raters to inform their donations, then there better be some accuracy, reliability and credibility to the raters and their processes.

If nothing else, this is a really unfortunate, highly visible case of the problems with #embeddedgiving - if "up to 7% of sales goes to charity" is advertised, there is a 0-7% range at work. It is not easy to track these distributions (as AIP notes). From a perception standpoint, if you asked Mortenson's 1000+ person audiences where their money was going I bet they'd say "to educate girls in Pakistan and Afghanistan." They wouldn't say "0-7% of it helps girls, the rest helps Mr Mortenson and his publishers."

And that's just the "boring" financial stuff. I also got into a bit of twitter back and forth about who is benefiting and how much. Sunday night I sent out this tweet:

I have no idea if Krakauer is out to get Mortenson for some reason, if school was out of session, or to what degree the numbers of schools or beneficiaries may have been exaggerated - and that's the point. These doubts should effect what we think of the work. Unlike my twitter colleague, I don't agree that "there may be exaggeration, doesn't discount work done." It absolutely discounts the work done - millions of dollars to educate tens of thousands of school children is one thing. Millions of dollars to build fewer schools and educate fewer school children is something else all together. It is exactly a discounted effect. And it is a troublesome perception and trust issue.

Here's the short version - if the professional raters can't determine what funds are going where, how do you expect a small donor to do so? If the raters can't agree on the financials, let alone on whether or not the claimed number of schools were built and kids were educated, what's a donor to do? We've got a concentric circle trust problem if we can't depend on the nonprofits to report correctly or the rating agencies to rate properly (or at least consistently).

In the Blueprint 2011 report I noted that we are experiencing a rise in giving indices. These new, more frequent indices are made possible as online giving increases and ready streams of data become more available.

They are also driven by the need for competing vendors to claim an expertise in their space. I noted the rise of Blackbaud's indices (released today), Convio's data analyses, quarterly public announcements from national donor advised funds such as Fidelity and Schwab, and increased frequency of reporting and predictions from the Foundation Center, Guidestar, and others.

Today, Sean Stannard Stockton points to another player, Philanthromax, and its Atlas of Giving. He describes it as "real-time" - which is inaccurate. It is monthly, which simply makes it more frequent than the other sources but it is not real time. Real time data are those that you can watch as they are generated - such as on the "trending" list on Twitter. Monthly reporting is monthly reporting. It is certainly more frequent that the annual Giving USA report to which Sean compares it.

More data sources are good. We're at the point in the market cycle of these data providers where everyone will put a product into the marketplace and some will succeed. In the meantime, we'll face some confusion over which one measures what, what methodologies are being used, who is right more than wrong - the usual market response to suddenly crowded market niches.

This is what is happening right now with both charity raters (Charity Navigator, AIP, BBB, GiveWell, etc) and with online giving platforms (GlobalGiving, Kiva, Jumo and the 60+ others out there). We discussed the abundance of online platforms with Chris Hughes of Jumo last week at the Global Philanthropy Forum. I'm going to address the problem about the multitude of raters in my next post about the Greg Mortenson/3 Cups of Tea controversy.

2) Not all "good" tech projects are apps. Some of them are about the less sexy work of cleaning the data, arraying it, linking it, and making it available. The work of The Sunlight Foundation to do this with campaign contributions demonstrates this. Sunlight manages to make cool apps, do real time data visualization streaming that make political debates more interesting, while also keeping the back end going. Another key example is the way the Pew Centers make their findings and their data available. DonorsChoose just announced a "hacking education" challenge using their data - check it out here. Winners will be featured on The Colbert Report.

NETRA is an inexpensive mobile visual testing tool, which is a clip-on eyepiece for mobile phones that can instantly screen for eye conditions and transmit data to an optometrist, allowing for early treatment of common refractive eye disorders and cataracts.First Place Winner of Vodafone Americas Foundation Wireless Innovation Project™

CoolComply is a solar-powered wireless detection system that monitors the doses and the temperature of medication.

The World Bank will announce the winners of the App for Development Contest on April 14. Here's the gallery of applicants. Here is the list of winners - including winners from Uganda, Jamaica, Kenya, a game from the Netherlands, and the Foundation Center.

One Economy Corporation is hosting the Applications for Good Contest. $50,000 prize for mobile apps that serve the public good, deadline is May 16.

4) Games and Gaming Pedagogy

You know all those frequent flier points you accumulate and the free cup of coffee you get after buying 10? That's gaming pedagogy at work. Points for accomplishing something, a slight increase in the challenge as you master one level, and a little bit of friendly competition - that's all gaming pedagogy at work. Digital tech lets us use these motivators in all kinds of ways - you may be "playing a game" without even realizing it. Games and gamification are becoming a core part of how we make change happen - here are some examples:

From the HopeLab folks (Makers of RE: Mission) comes Zamzee, a movement enticing tool for young people.

A great list of games that engage and get good things done can be found at Games4Change. Better yet, join them in NYC in June for the annual festival and see these games, meet the game makers in person.

Tuesday, April 12, 2011

The Craigslist Foundation unveiled its LikeMinded network today - you can check it out here. This is the second launch from the Foundation in 2011 - they launched CraigConnects several weeks ago.

LikeMinded, which is supported by the Knight Foundation and Craigslist Foundation, is a way for people to share their own stories of making a difference in their communities and to connect with their local officials.

CraigConnects is Craig Newmark's 20 year commitment to sharing his work with local organizations and giving others a place to do so as well. I'm looking forward to June 2 in San Francisco when I'll be interviewing Craig about these developments as part of the Craigslist Foundation Boot Camp.

Tomorrow at the Global Philanthropy Forum I'm interviewing Chris Hughes of Jumo and Leila Janah of SamaSource about the roles that technology plays in the social sector. Judging from the launches of LikeMinded and CraigConnects it clearly plays a facilitative, news sharing, organizing role.

Jumo is structured so that the technology also plays what I think of as a "train station" role - it's a meeting place, connection hub, information source all in one.

SamaSource is using the internet as the new work space - literally creating a marketplace of jobs on and about digital work. This marketplace is by definition global, disbursed, and a "loose coupling of many small pieces." The internet is both the infrastructure for and the source of the work.

These are all organically digital uses of the internet. They're based on assumptions about information, audience, scope, and access that reflect the way these things work in a global, connected, always on, super fast environment. Their business models respect the value of the pieces being connected, whether those are individual workers to Fortune 500 companies (SamaSource) or activists to each other (LikeMinded). All of these sites share a mix of data and social connections as core design elements - similar to the power of the Peer Water Exchange which I mentioned a few days ago, and which offers one of these "head to long tail" platforms I've written about for years.

I'm looking forward to my conversation tomorrow with Leila and Chris. I plan to double check my insights with them, get their wisdom on what's next for platforms and social policy, and what they imagine we'll see as more and more digitally native social solutions come online. Join us if you can (Twitter Hashtag #gpf2011)

Friday, April 08, 2011

I had a chance last week to hear from two Egyptian political activists and social sector leaders. They were talking about the need to build a whole new civil society regulatory structure in their country. I think we're all going to be building new civil society laws in the next decade.

After years of thinking about it, I can now answer this question "Why does technology matter to philanthropy?" in one bumper sticker response (very tweetable!):

changing technologies + new enterprises = need for new rules

Unlike those who debate "Was it a Twitter revolution or not?" I think technologies are value neutral.* It's how we use them and how we set up institutions to benefit from and control them. Some will use them to expand democracy, others will use them to seize control. Some will use them to create social goods in new ways, others will seek to maintain the status quo.

I think the most influential result of disruptive technologies and new enterprises/impact investing will be the new rules they require us to consider and implement. This is why tax differences between Amazon and Target matter - the principle of tax privilege and changing rules is the same for new and old enterprises producing social goods.

That's my big thought for this Friday.

*When I understood better what Jaron Lanier is talking about regarding the deep coded decisions and values in many of our most consumed technologies, I'll probably change my mind on this.

Check out the Institute and its research, programs, salons, and fellows. Data, the robot fellow (picture above) is quite something don't you think? Look for us online and in person at upcoming salons. And you can follow the whole crowd on this Twitter list.

Hybrid reality augments my day job, my blogging, and my role as a visiting scholar at Stanford.

Wednesday, April 06, 2011

People often ask me how I keep up with all the ways people are using technology for good. The answer is, I don't. There's no way (that I've been able to think of) to stay totally on the cutting edge of what folks are doing with mobile, social networks, SMS, NFC, AI, and AR (Yes, those are gratuitous, albeit real, acronyms for tech stuff).

Luckily (for me) our behaviors and expectations for information and organizing and gathering and monitoring and sensemaking change more slowly than do the actual technologies. That's not to say I can keep up with the human applications of new tools, but at least it requires a slightly slower pace than keeping up with the tools themselves.

Tuesday, April 05, 2011

What makes for a smart giver? Tom Tierney and Joel Fleishman believe it requires reflection, humility, persistence, and clarity of purpose. I’d agree with them on all of those attributes. I found a lot to like in their new book, Give Smart. It is the most accessible guide for donors I’ve read in a long time. It’s full of stories drawn from the authors’ own work with donors and foundations. Most of these stories identify the people or organizations involved. This lets a studious reader follow up on the ideas or programs discussed.

Of course, the stories with unnamed sources are the most intriguing. These are where the authors take the most freedom to point out basic arrogance or the perfect vision of hindsight. Fleishman and Tierney have drawn out several important themes and laid them out in such a way that the book will be auseful reflection tool for established boards and a primer for startup donors.

Unless, that is, the donor has any pre-existing presence on social networks, has made their own money, or is not yet married with children. It’s not that some of Tierney/Fleishman’s advice doesn’t fit the young, single, tech-savvy donor – but none of it is written for them. Donors without children may find the sections on family value setting quaint. The assumptions simply don’t resonate for donors who have most of their lives ahead of them. Role setting for future generations, the release of control to staff or a board, endowing a foundation in perpetuity – these frames can’t be assumed for a fast growing and influential segment of the book’s target audience.

The book makes no mention of peer networks – online and off – critical components of doing everything for just about everybody younger than a baby boomer.It makes no reference to the changing landscape of data on giving. It largely ignores the growth of tertiary products and services that donors navigate even before they begin giving. This is a funny oversight, since Tierney runs Bridgespan, a dominant firm in the advisory services industry.

Tierney and Fleishman do encourage "smart" donors to consider carefully the relationships between their resources, their aspirations, and public sector support for those issues. This is more important than ever. Public budgets are being slashed and philanthropy, whether it seeks it or not, is getting more and more scrutiny. Let's not fool ourselves - the hottest political question of our day is at stake - what is the proper role of government? Similar questions needs to be asked about philanthropy - what do we really want it to do and how do we want to promote choice and voluntary giving - today. The last time we had this discussion in full, in legislative context, was...well, I'm not sure we've ever really had it.

There is one huge fallacy to be wary of - there is no philanthropy that can make up for public responsibilities. Private dollars are too tiny, too idiosyncratic, too fragmented. To hold simultaneous conversations about cutting public budgets and promoting charitable giving and volunteering without falling into this trap is hard - hence we get discussions like this one that don't ask the bigger questions about the purpose and potential of each sector. The UK is having these conversations right now, quite loudly. We should be listening.

Give Smart also makes short shrift of the selection process from investing to giving that more and more donors (and foundations) are integrating into their strategies.Whether you're a billionaire philanthropist or one of the 100s of millions of people who make up the long tail of the philanthropic revenue stream, you face daily choices about supporting causes by shopping, giving or investing. You can buy a pair of shoes and give a pair of shoes. You can invest your money in a fund that supports microfinance lenders, you can tithe at church, you can give strategically, and you can participate in your company's corporate giving efforts. In fact, more and more of us are doing all of these things. That's the new landscape - and smart givers are navigating it with data, relationships, peer groups, giving circles, and professional advisers. Tierney and Fleishman's book will help them with one important piece of that puzzle. Now if only we had a similiary useful manual for guiding the bigger discussion about public responsibilities and this changing philanthropic landscape.

Sunday, April 03, 2011

Kristine Salmi-Snowdeal of CROPP Cooperative/Organic Valley and it’s grant making fund, Farmers Advocating for Organics (FAFO) recently asked me for some advice on funding social media. I didn’t want to say no to the people from whom my family gets milk. I agreed to do so, if she would send me 5 questions and let me post the Q and A on Philanthropy 2173. The results are below. Thanks Kris, for asking and for letting me share some thoughts. I hope you have a great board meeting. And anyone who has something to add to my answers to Kris's questions - please post as comments or link us to your thoughts. Thanks.

1) In my mind, I often want to box up social media (as well as other digital marketing/media pieces) neatly and “put it someplace”. And yet, I am imagining you see it as a very different creature. Can you share a little of how you visualize its place in the funding world?

We are all digital now. The news business, public relations, citizen activism, entertainment media, stock quotes, commodity prices, education, museum exhibits, human rights campaigns and abuses, environmental conservation – there is a digital component to all of these things. In some cases – news, policy influence, community organization, entertainment, stock trading – the entire enterprise has been disrupted by these technologies. I think of them as being everyplace, not some place.

That said, these tools are only tools. Kevin Starr of the Mulago Foundation says it better than I can. “Social and mobile technologies can accelerate good ideas. They can also accelerate bad ideas. What matters is the quality of the idea.”

Funders should be thinking about the goal of the work, what it’s trying to make happen, and how technology (social, mobile, web-based) fits into the goal and activities.

2) If you were in a position to be able to fund a project, how would you evaluate components of a proposal which may be digital / social media in nature?

At the top level: What is the project trying to do? Who needs to change (and how) in order for the goals of the project to be successful? Do those people use the technology being proposed? If not, does the project account for how it will get them to use it, and does it address the difficulties of using new technologies? If yes, how does the technology facilitate the change being proposed? Will it make it happen faster? Reach more people? Be more inclusive? Build new feedback or information loops?

If the use of the technology is going to let more people have a voice in an issue, is the proposing organization aware and able to change in response to those voices? And if the use of technology isn’t going to let more people have a voice, why are they using the technology?

At a budget, operational level: How does the proposal explain its budget numbers (where did they get them from? – Many orgs just guess on a lot of this stuff) Are they promising to save a ton of money building something new? If so, don’t believe them – it rarely works that way, especially in the short term, especially for an organization new to using these tools.

Do they have the right “human” technology? Has anyone in the project ever “done this before?” Do they cite compelling (verifiable) examples of other organizations using similar technologies to do something similar? Are they asking for funds to “build something new?” Be cautious here – most of what most nonprofits need exists already. It may need to be modified or customized (see question above about whether the humans have ever done it before) but they don’t need to build a new social network or invent a new communications tool.

3) Who are the exemplary organizations that come to your mind when you think about who is using digital / social media in their funding and why? Who are exemplars in using SM in marketing their own organizations and why?

Using social media in their funding – see the work the CASE Foundation has done in activating giving on social networks, their own website, and their case studies of what’s worked and not. Robert Wood Johnson Foundation uses these tools well for finding new ideas and being in conversation with people. The Mott Foundation does a great job of sharing news on its grant making. See www.glasspockets.org for a list of foundations using digital tools and for what purposes.

Using SM for marketing – The Benton Foundation shares research. Peery Foundation in Palo Alto has experimented with using Twitter to engage people in its strategic planning (as has The Foundation Center). Participant Media (part of Jeff Skoll’s circle of social companies) put QR codes into the credits of Waiting For Superman (the movie) that drove hundreds of thousands of people to take action on an issue. (And may have influenced the public debate in Wisconsin about public unions) Ushahidi (a nonprofit) does amazing community crowdsourcing with social media. NPR is a leader in using social media for news gathering, sharing, and fundraising. The American Red Cross has done great things with web video, Twitter, Facebook and building awareness, and public support.

The list goes on and on and on….

4) If I look at the rate of change over the last few years, and extrapolate that outward, what kinds of digital media/ digital marketing / social media do you see as being an effective way to structure their outreach to the organization’s end user? How will one ever capture the attention of the audience with sooo much information about?

I can’t predict where any of this is going. But I do see storytelling making a comeback. On all media platforms there needs to be a compelling story and a small act for someone to take. Digital tools let anyone be the storyteller – we can all weave together data, photos, video, and audio and distribute it around the world. So two things are happening – lots of stories that were not being heard before now have a chance and the need for trusted editors/filters/curators is rising.

The most important difference I think is that these are listening tools, not broadcast tools. Organizations that use Twitter, FB, QR codes to push out info are going to be noise. Organizations that listen to their communities, help people find each other, suggest ideas, take action, and respond and change according to what they hear – those will be the signal organizations.

5) If you had a statement of advice to give to a Committee of funders who’s primary expertise is farming / agriculture, though not exclusively of course, what would it be?

What are you trying to make happen and for whom? Do these tools amplify or accelerate that work? If so, how? And how will you know?

I welcome your thoughts and answers to Kris's questions. Please feel free to add your thoughts in the comments.

About me

Why is this blog called Philanthropy 2173?

This is a blog about the future. The year 2173 seems sufficiently far enough in the future to give us some perspective. As sure as we are of ourselves now, talking about the future - and making philanthropic investments - requires that we keep a sense of modesty and humor about what we are doing. Philanthropy is for the long-term - for the year 2173.